In the latest close session, DraftKings (DKNG) was up +2.02% at $34.90. The stock outperformed the S&P 500, which registered a daily gain of 0.64%. On the other hand, the Dow registered a gain of 0.47%, and the technology-centric Nasdaq increased by 0.52%.
Shares of the company witnessed a gain of 14.07% over the previous month, beating the performance of the Consumer Discretionary sector with its gain of 2.47%, and the S&P 500's gain of 3%.
The upcoming earnings release of DraftKings will be of great interest to investors. On that day, DraftKings is projected to report earnings of $0.38 per share, which would represent year-over-year growth of 235.71%. Alongside, our most recent consensus estimate is anticipating revenue of $1.94 billion, indicating a 38.95% upward movement from the same quarter last year.
DKNG's full-year Zacks Consensus Estimates are calling for earnings of $0.77 per share and revenue of $6 billion. These results would represent year-over-year changes of +173.33% and +25.86%, respectively.
It is also important to note the recent changes to analyst estimates for DraftKings. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. DraftKings is currently a Zacks Rank #5 (Strong Sell).
In the context of valuation, DraftKings is at present trading with a Forward P/E ratio of 44.43. Its industry sports an average Forward P/E of 23.16, so one might conclude that DraftKings is trading at a premium comparatively.
Investors should also note that DKNG has a PEG ratio of 0.88 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Gaming stocks are, on average, holding a PEG ratio of 2.03 based on yesterday's closing prices.
The Gaming industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 185, placing it within the bottom 26% of over 250 industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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DraftKings Inc. (DKNG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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